When you die, someone will have to manage your estate, take charge of the assets and divide them as your will or if there is no will, as the law provides.
If you have a Will, that person will be named in the Will, and is known as your Executor. If you do not have a Will, someone or more persons will have to be appointed by the Court as the Administrator of your estate. To be eligible to be appointed as an administrator, a person must be a beneficiary – and if there are a number of beneficiaries, must have the consent of the others. The guardian of an infant beneficiary is eligible. In the alternative, a trustee company or the Public Trustee – now known as the NSW Trustee and Guardian – can be appointed. They are entitled to charge, based on the capital value of the estate, and on the income the estate receives.
If you have a Will, you will have named an executor or executors. How should they be chosen? If you have a relatively simple estate which all goes to a spouse or partner, it makes sense to appoint that person – they will be the only person with any interest in how the estate is managed. The choices can become more complicated where there are a number of beneficiaries, or where there are some special factors. Typical examples of these types of situations are where adult children who do not get on are involved, or where there are infant children involved. Second relationships can also require careful thought.
Using a few basic guidelines will help minimise potential problems. Firstly, you do not want a cumbersome number of executors, particularly if one or more are distant – there will be documents to sign and decisions to be made. Secondly, if you are not going to appoint someone who might expect to be an executor, consider telling them now, rather than have them surprised and disappointed at the time of your death. Thirdly, if your estate will provide for infant children, consider having the person likely to be their carer as one executor, joined by someone, perhaps another relative, who has some financial knowledge. Fourthly, where complications or problems are foreseeable, consider appointing a professional or a disinterested family friend or relative as an executor. In any situation, though, make sure that the person or persons you would like to take on the duty are prepared to do so.
Sometimes being an executor can be a relatively simple and straightforward duty, but one never knows in advance what may happen. If your executor ends up with a difficult job, how can they be rewarded? On application, the Court can award “Commission”, which is a percentage of the estate’s capital and income. Applying can be a time-consuming and expensive job, so we recommend that instead you consider making some express provision in your Will for compensation to executors for undertaking their responsibilities
Finally, make sure you make your executor’s task as easy as possible by keeping your records in order, and telling your executor where your documents and records are kept.
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Northern Beaches Lawyers – City Experience by the Beach